Peoples Bancorp of North Carolina, Inc. (PEBK): BCG Matrix [Dec-2025 Updated]

You're looking to see where Peoples Bancorp of North Carolina, Inc. (PEBK) is placing its bets for the next few years, right? Honestly, mapping their business lines onto the four-quadrant framework shows a clear strategic tension: we've got high-growth Stars like specialized commercial real estate lending and digital banking initiatives pulling capital, while the bedrock Cash Cows-think core Net Interest Income from that stable deposit base and traditional mortgages-are funding the show. Still, management needs to decide what to do with the Dogs, like those low-volume, legacy branch locations, and critically, how much fuel to pour into the Question Marks, such as that recent, small-scale expansion into wealth management or unproven new lending products. This breakdown tells you exactly where PEBK needs to invest, harvest, or divest to maximize returns through 2026.

Background of Peoples Bancorp of North Carolina, Inc. (PEBK)

You're looking at Peoples Bancorp of North Carolina, Inc. (PEBK), which operates as the holding company for Peoples Bank, a state-chartered commercial bank right there in North Carolina. Honestly, the structure is pretty standard for a regional player; they have a few subsidiaries helping out, like Peoples Investment Services, Inc., Real Estate Advisory Services, Inc., Community Bank Real Estate Solutions, LLC (CBRES), and PB Real Estate Holdings, LLC.

Management has officially carved up the business into two main operating segments for reporting: Banking Operations and CBRES. The bank itself keeps its physical presence concentrated, operating about 15 banking offices and loan production offices across several North Carolina counties, including Catawba, Alexander, Lincoln, Mecklenburg, and Iredell, as of late 2025. That focus within the state is definitely a key part of their story.

When you look at the loan book, it's diversified, which is good; they don't have foreign loans and only a small amount in agriculture. Still, they do have some Individual Taxpayer Identification Number (ITIN) mortgage loans that came from their former Banco offices-a specific detail you should note.

For the numbers you need for the matrix, let's look at the most recent data we have leading into the end of 2025. Peoples Bancorp of North Carolina, Inc. reported third quarter 2025 results in October. For the three months ending September 30, 2025, net earnings came in at $3.7 million, translating to $0.70 per share. Year-to-date, through September 30, 2025, the net earnings were $13.2 million.

On the balance sheet side as of September 30, 2025, total assets stood at $1.74 billion, with total loans at $1.18 billion and total deposits at $1.55 billion. The net interest margin for that third quarter was 3.58%. Plus, the Board declared a regular fourth quarter 2025 cash dividend of $0.20 per share, which they plan to pay out on December 15, 2025. That consistent dividend action is something investors definitely watch.

Peoples Bancorp of North Carolina, Inc. (PEBK) - BCG Matrix: Stars

You're looking at the business units within Peoples Bancorp of North Carolina, Inc. (PEBK) that are clearly operating in high-growth segments and capturing significant market share, which is the hallmark of a Star in the BCG framework. These areas require heavy investment to maintain that lead, but they are the future cash cows if the market growth moderates while market share is held.

The overall loan portfolio is definitely expanding, which signals success in the core lending markets Peoples Bancorp of North Carolina, Inc. targets. Total loans reached $1.18 billion as of September 30, 2025, up from $1.14 billion at the end of 2024. This growth trajectory is supported by the mid-year numbers, showing strong momentum.

The primary engine for this growth is clearly in the commercial and real estate segments, which aligns with the profile of a Star in a growing regional economy like North Carolina. Here's a look at the loan portfolio expansion reported for the second quarter of 2025:

The period-end total loan and lease balances at June 30, 2025, showed an annualized increase of 11% compared to March 31, 2025, totaling a $173.1 million increase for the quarter. This rapid pace of asset growth suggests high demand in the markets Peoples Bancorp of North Carolina, Inc. serves.

Specialized commercial real estate lending in high-growth North Carolina markets is a key driver. While the most granular 2025 loan mix data is from 2024, where the loan book stood with 45% in CRE loans and 35% in residential mortgages, the Q2 2025 growth figures confirm these areas are still leading the charge. Furthermore, the increase in appraisal management fee income by $1.9 million year-over-year for the nine months ended September 30, 2025, points directly to high volume in property-related transactions, like real estate lending.

The high-performing Commercial and Industrial (C&I) loan portfolio is definitely showing strong year-over-year growth, as evidenced by the $63.6 million increase in Q2 2025 alone. This segment, along with the overall loan book, is contributing to a better net interest income profile, which was $15.1 million for the third quarter of 2025, up from $13.5 million in Q3 2024. The operational efficiency also improved, with the efficiency ratio moving to 57.1% in Q3 2025 from 59.3%.

Regarding digital banking initiatives capturing a growing share of younger, local customers, the data points to a strong core deposit base, which is often a proxy for local customer capture. Core deposits were 89.65% of total deposits at September 30, 2025, totaling $1.39 billion. The bank is focused on organic growth, and the 2026 loan growth projection of 3-5% suggests continued confidence in capturing market share organically.

The success in these high-growth areas is what positions these business units as Stars. They are consuming cash to fuel this growth, but the strong net interest income and improved efficiency suggest the cash flow is being managed effectively to sustain the leadership position. The key components fueling this Star status include:

• Commercial and Industrial (C&I) loan growth of $63.6 million in Q2 2025.
• Total loan and lease balances growing at an annualized rate of 11% in Q2 2025.
• Net interest income for Q3 2025 at $15.1 million, up from $13.5 million YoY.
• Appraisal management fee income up $1.9 million for the nine months ended September 30, 2025.
• Efficiency ratio improved to 57.1% in Q3 2025.

While specific data on expansion into adjacent, high-demand counties isn't explicitly detailed in the latest reports, the overall loan growth across multiple real estate and C&I categories within the North Carolina focus strongly implies successful execution across their existing footprint, which is dedicated to serving the North Carolina business community.

Peoples Bancorp of North Carolina, Inc. (PEBK) - BCG Matrix: Cash Cows

You're looking at the core, reliable engine of Peoples Bancorp of North Carolina, Inc. These are the business activities that have achieved dominance in their established markets, generating more cash than they consume to support the rest of the enterprise.

Core Net Interest Income (NII) from the long-established, stable deposit base

The foundation of this cash generation comes from the stable funding base. Core deposits represent a significant portion of total funding, indicating customer stickiness in the bank's operating footprint across North Carolina counties like Catawba, Lincoln, and Mecklenburg. For the third quarter of 2025, core deposits comprised approximately 89.65% of total deposits. This stability allows Peoples Bancorp of North Carolina, Inc. to manage its cost of funds effectively, even as market rates shift. For the three months ended September 30, 2025, the bank reported Net Interest Income (NII) of $15.1 million. This followed NII of $14.60 million in the second quarter of 2025. The Net Interest Margin (NIM) for Q3 2025 expanded to 3.58% (tax-equivalent), benefiting from lower rates paid on interest-bearing liabilities.

The stability of the funding base is reflected in the balance sheet as of June 30, 2025, where total deposits stood at $1.51 billion year-to-date.

Traditional residential mortgage portfolio with low default rates and predictable cash flow

The loan book, which totaled $1.16 billion at June 30, 2025, contains a significant, mature component in real estate lending. Consolidated loans secured by real estate amounted to $1,084,039 thousand as of the same date. The quality of this portfolio is a key characteristic of a Cash Cow, showing minimal stress. Non-performing assets (NPAs) were stable at 0.28% of total assets as of June 30, 2025. This low level of impaired assets suggests predictable cash flow from the underlying loan collateral, which is essential for consistent earnings.

Here's a look at the asset quality trend:

Fee income from long-standing, loyal business checking and treasury management accounts

While the market for general treasury services is mature, Peoples Bancorp of North Carolina, Inc. has successfully established high-share ancillary fee streams. The most visible of these in recent reporting is the appraisal management service. For the three months ended September 30, 2025, Appraisal Management Fee Income was $3.6 million. This compares to $3.97 million in the second quarter of 2025. The consistency of this fee stream, driven by appraisal volume, supports the overall Non-Interest Income, which was $3.5 million in Q3 2025.

The bank's ability to generate non-interest income, despite a decline in miscellaneous sources like SBIC investments, points to the durability of its core fee-generating relationships.

• Appraisal Management Fee Income (Q3 2025): $3.6 million.
• Non-Interest Income (Q3 2025): $3.5 million.
• Non-Interest Income (Q2 2025): $7.7 million.

The bank's consistent, well-covered dividend payout, reflecting stable earnings

The commitment to shareholders, a hallmark of a strong Cash Cow, is evident in the dividend policy. The Board declared a regular cash dividend of $0.20 per share for the fourth quarter of 2025, payable on December 15, 2025. This consistent quarterly payout implies the earnings are stable enough to support capital returns without strain. The annualized dividend yield based on this latest declaration is approximately 2.4%. Peoples Bancorp of North Carolina, Inc. has managed to increase its dividend payment for the last 1 consecutive years. The bank reported net earnings of $3.8 million for the three months ended September 30, 2025.

The dividend history shows a steady cadence:

• Q4 2025 Declared Dividend: $0.20 per share.
• Six Months Ended June 30, 2025 Total Dividend: $0.56 per share.
• Book Value per Share (as of Q2 2025): Rose to $27.12.

The company's market capitalization as of October 31, 2025, was $156M, with 5.31 million shares outstanding.

Peoples Bancorp of North Carolina, Inc. (PEBK) - BCG Matrix: Dogs

Dogs, are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

Dogs should be avoided and minimized. Expensive turn-around plans usually do not help.

For Peoples Bancorp of North Carolina, Inc., the indicators pointing toward the Dogs quadrant involve specific asset classes and operational units that are not contributing optimally to growth or profitability as of the third quarter of 2025.

Low-volume, legacy branch locations in stagnant or declining rural areas

The trend of digital adoption continues to pressure the physical footprint. Peoples Bancorp of North Carolina, Inc. executed a permanent closure of its Raleigh, NC branch located at 4000 Westchase Boulevard, Suite 100, effective August 1, 2025. This action suggests a strategic move away from locations deemed low-volume or no longer core to the immediate operating strategy.

Certain older, low-yield investment securities held on the balance sheet

The impact of holding lower-yielding assets is directly reflected in realized losses during the reporting period. The net loss for the first nine months of 2025 was reported at $3.7 million. A significant portion of this loss, specifically $2.7 million, was attributed to the net loss on the sale of lower yielding available-for-sale securities. This indicates that the cost of holding these assets, or the opportunity cost realized upon sale, was material to the nine-month result.

The balance sheet composition as of September 30, 2025, shows available for sale securities totaling $376.9 million against total assets of $1.74 billion.

Here's a quick look at the financial data illustrating potential Dog characteristics:

Underperforming or non-core assets that require disproportionate management time

The existence of non-performing assets, while small relative to total assets, represents assets requiring active management and workout efforts rather than passive growth. The total non-performing assets stood at $5.1 million as of September 30, 2025.

Any legacy consumer loan products with thin margins and high servicing costs

Specific leasing segments appear to be under pressure, suggesting legacy or specialized products may be candidates for this quadrant. The North Star Leasing business was specifically cited as the primary driver for an increase in net charge-offs during the second quarter of 2025 compared to the prior year period. The allowance for credit losses on leases originated by the North Star Leasing division increased in the second quarter of 2025.

The overall Net Interest Margin (NIM) for the three months ended September 30, 2025, was 3.58%. While the NIM improved year-over-year, specific product lines like the North Star leases may be dragging down the overall portfolio yield or increasing servicing overhead.

You should review the following operational areas for potential divestiture or minimization:

• The specific portfolio of North Star Leasing assets contributing to charge-offs.
• The $5.1 million in Non-performing Assets as of September 30, 2025.
• The investment securities sold that resulted in a $2.7 million loss in the first nine months of 2025.
• The branch location that was permanently closed on August 1, 2025, in Raleigh, NC.

Finance: draft 13-week cash view by Friday.

Peoples Bancorp of North Carolina, Inc. (PEBK) - BCG Matrix: Question Marks

You're looking at business units within Peoples Bancorp of North Carolina, Inc. that are operating in markets with significant upside potential but haven't yet captured a commanding position. These are the classic Question Marks-they demand cash to fuel growth but currently return little profit relative to that investment. They are cash-hungry ventures that need a clear path to market leadership or they risk becoming Dogs.

For Peoples Bancorp of North Carolina, Inc., these Question Marks likely center on newer, high-potential service lines or geographic pushes where the initial investment in infrastructure, technology, and marketing is high, and market share gains are not yet guaranteed. The strategy here is decisive: either pour in the capital needed to secure a dominant share quickly, turning them into Stars, or decide the investment isn't worth the risk and divest.

Consider the recent expansion into wealth management. While the overall banking operations show stability, this segment represents a high-growth area where Peoples Bancorp of North Carolina, Inc. is still building its footprint. As of September 30, 2025, the firm reported $4.1 billion in assets under administration and management, which includes brokerage, trust, and retirement planning services. This figure shows activity, but in the broader financial services landscape, this level of assets under management might represent a low relative market share compared to national or even regional powerhouses, placing it squarely in the Question Mark quadrant.

The need for investment is clear when you look at the operational context. The firm is focused on organic growth, with a 2026 loan growth projection targeted between 3% and 5%. Capturing that growth often means developing and marketing specialized products that require upfront capital before they generate meaningful returns.

Here's a snapshot of the financial environment supporting these growth-oriented units:

The push for operational efficiency, evidenced by the Q3 2025 efficiency ratio of 57.11%, suggests management is keenly aware of the cash drain from new initiatives. Fintech partnerships are a likely area consuming capital now to reduce future operating costs or improve customer acquisition in these new segments.

The potential Question Marks for Peoples Bancorp of North Carolina, Inc. include:

• Recent, small-scale expansion into wealth management or trust services.
• Potential new fintech partnerships aimed at improving operational efficiency.
• Plans for geographic expansion into a new, highly competitive metropolitan area.
• Unproven new lending products, such as specialized small business administration (SBA) loans.

For the geographic expansion, Peoples Bank currently operates 16 banking offices entirely within North Carolina, spanning counties like Catawba, Mecklenburg, and Wake. Any move into a new, highly competitive metropolitan area outside this established footprint would require significant initial investment in physical presence or digital infrastructure, fitting the high-growth, low-share profile.

Regarding unproven lending products, while the bank offers a variety of business loans including commercial real estate and equipment loans, the introduction of specialized, unproven products like niche SBA loan programs would require building new underwriting expertise and marketing them from a low base. These new products consume resources-cash and personnel-before they can prove their market viability.

Finance: draft 13-week cash view by Friday.